Employment Status Tool

HMRC’s employment status service can be used to help ascertain if a worker should be classified as employed or self-employed for tax purposes in both the private and public sector. The service has recently been updated to reflect off-payroll working changes that came into effect on 6 April 2021.

The service provides HMRC’s view as to whether IR35 legislation applies to a particular engagement and whether a worker should pay tax through PAYE as well as helping to determine if the off-payroll working in the public sector rules apply to a public sector engagement.

The software can be used to check the employment status of:

• a worker providing services;
• a person or organisation hiring a worker; or
• an agency placing a worker.

HMRC has said that it will stand by the result given unless a compliance check finds the information provided was not accurate. HMRC will not stand by the results of contrived arrangements designed to achieve a particular outcome. HMRC are clear that this would be treated as evidence of deliberate non-compliance and could result in higher penalties.

The service is anonymous, and the results are not stored online. However, the results can be printed and held for your own records. If any changes take place to the workers role their status should be reassessed.